The Canadian company said after markets closed on Tuesday that it now expects fourth-quarter revenue of C$18.5 million ($15 million) to C$19.5 million ($15.9 million), down from its previous forecast of C$21 million to C$24 million.

It also expects to take a C$2.8 million inventory writedown when it reports financial results March 9 to reflect a global drop in photovoltaic cell and silicon prices.

The company, whose solar cells convert sunlight into electricity, said it would try to scale back manufacturing during 2009, but would not issue any financial forecasts due to market uncertainty.

Arise said it is currently in talks with customers and suppliers, which could result in repriced or renegotiated deals in 2009.

Shares in Arise slumped to 29.5 Canadian cents on the Toronto Stock Exchange, nearing a three-year low.

Haywood Securities cut its share-price target for Arise to C$2 from C$2.80. The stock touched a record high of C$3.30 in late 2007.

“These are extraordinarily tumultuous times and they require extraordinary measures and swift action by companies to deal with rapidly changing conditions,” interim Chief Executive Vern Heinrichs, who is also chairman, said in a statement.

Former CEO Bart Tichelman resigned in late January, a move that surprised markets and sparked an executive search.

The Waterloo, Ontario-based company now faces an array of challenges, analysts said.

Successful in its push to develop production skills, Arise is now being stung by a drop in demand, falling prices and reduced financial incentives for solar-generated electricity.

Installation of a second production line at the company’s German manufacturing plant is seen as critical because it will make more energy efficient products. That will help differentiate Arise and boost the value of its solar cells in a highly competitive market.

Work on that production line is back on schedule for completion early in the second quarter, Arise said on Tuesday. Previously, it faced a four- to eight-week delay while waiting for a key piece of equipment.

“Even though the company has booked nearly 100 percent of the output from lines one and two for 2009 and beyond, it may see continued deferrals for delivery,” Fraser Mackenzie analyst John Safrance said in a note.